Pre-Open Market Analysis
Everybody knows that the Emini S&P 500 is in a buy climax on the daily chart. On the 5 minute chart, there was a huge Bear Major Surprise Bar yesterday at 10:40 pm PST. It was big enough to possibly affect the next several days. A bar like that is always news related. Here, it was due to the China tariffs.However, yesterday’s rally up from a new low of the day and the 60-minute EMA was big enough to create confusion. Confusion typically results in some trading range price action, as it did over the final half of yesterday. The day was a bull doji day on the daily chart, which is a trading range day.As good as the one bar selloff was for the bears, there is no top yet on the daily chart. The bulls will continue to buy 1 – 3 day selloffs.
Overnight Emini Globex Trading
The Emini is down 6 points in the Globex session. It will therefore probably open within yesterday’s range.
Yesterday was a doji bar on the daily chart, which represents a neutral market. It was a pause in a strong bull trend on the daily chart.
Most days over the past several weeks have had relatively big ranges and at least one swing up and one swing down. Since the daily chart is in a strong bull trend, there are more rallies than selloffs and the rallies have been bigger. Day traders will expect that price action to continue again today.
However, the daily chart is in a buy climax. There is therefore an increased chance of either a surprisingly big 1 – 3 day rally to a blow-off top or a big selloff and the start of a 2 – 3 week pullback.
Yesterday’s Setups
Here are several reasonable stop entry setups from yesterday. I show each buy entry with a green rectangle and each sell entry with a red rectangle. I rarely also show limit order entries and entries on the close of bars. Buyers of the Brooks Trading Course and Encyclopedia of Chart Patterns have access to a much more detailed explanation of the swing trades for each day.
My goal with these charts is to present an Always In perspective. If a trader was trying to be Always In or nearly Always In a position all day, and he was not currently in the market, these entries would be logical times for him to enter.